The Government’s Business Secretary, Alok Sharma, has announced a commitment to change insolvency laws so that if a business is unable to meet its debts, due to the impact of coronavirus, then they cannot be forced into an insolvency procedure, for example, liquidation or bankruptcy.
This means that companies undergoing a rescue or restructure can keep trading. It was also added that wrongful trading law could be temporarily lifted from 1 March 2020, for three months, to remove the personal liability from company Directors for decisions made during the pandemic. For example, if Directors utilise Government support delaying putting the company into insolvency.
To enable these changes new legislation is needed, further updates will follow. Read the Government update here.